NCUF, Filene Piloting Subprime Auto Loans

The National Credit Union Foundation, in partnership with the Filene Research Institute, said 14 credit unions will participate in a product incubator for subprime auto loans.

The loan, a NCUF product, is one of five products in Filene’s accessible financial services incubator funded by the Ford Foundation, according to both credit union organizations.

“Credit unions have a long history as being the proving ground for consumer centric, innovative financial products,” said Cynthia Campbell, director of innovation labs at Filene, “and partnering with the NCUF to test the viability of non-prime auto loans with mainstream financial institutions was a natural fit since their experience in working with low-to-moderate income consumers is extensive.”

“Without a car, options for work, food, childcare and healthcare become limited. Economic mobility is strengthened through the mobility that comes with affordable, reliable wheels. This product increases access to affordable auto loans to those who have credit challenges,” Filene and NCUF said.

It is estimated that families can increase their income by as much as 25% with access to reliable transportation, said Gigi Hyland, NCUF executive director.

“We’re excited to work with not only Filene on this project but also such a wide array of credit unions across the country to give affordable, safe and reliable used cars to those that need them most,” said Hyland.

The following credit unions will be testing the subprime auto loan product: